Credit cards: A year in review, and what’s changed?

credit-card-year-review

In between investing in reusable masks and learning to ‘check in’, a lot went down in the credit card world last year. 

Aside from being asked to exclusively try to use plastic to limit the spread of Covid-19, credit card providers were also left with the task of managing redundant travel rewards programs and assisting financially vulnerable customers. 

To give you an official recap, we’ve broken some of the credit card news highlights over the last year.

What did credit card spending look like in the last 12 months?

The short answer, an absolute rollercoaster. 

First, credit card spending plateaued. In fact, a study conducted by data analytics and consumer intelligence company J.D. Power found that 42% of credit card customers decreased their usage last year. 

Mozo also found that 25% of Aussies received a ‘financial wakeup call’ during the height of the Covid-19 pandemic and made the decision to get debt-free once and for all. 

However, as we headed into the festive season, spending picked up again before dropping in Jan and spiking again in Feb of 2021. We weren’t kidding when we said it was a rollercoaster.

Credit card rates, featured and fees: What changed?

It’s not often you see credit card providers slash purchase rates on products, but given the financial strain the pandemic placed on many Aussies, priorities changed. 

In April 2020, Mozo reported that five providers cut rates on their cards between 25 and 100 basis points. Other support measures that were introduced were deferring repayments, waiving late fees and interest or lowering the minimum repayment amount. 

Like we said, credit card rates rarely change, even with the numerous RBA rate cuts over the last eight years. That’s why we decided to do some digging on the matter. 

According to our number crunch, credit card providers have profited a whopping $6.4 billion by not passing on RBA rate cuts to customers. The one card issuer who did pass on the most recent cut was Auswide Bank, shaving 15 basis points off its Low Rate credit card.

What about rewards cards and bonus point deals?

With international travel a no-go zone until further notice, many Aussies began to see their rewards card in a different light. 

We found that 66% of Aussies say rewards cards aren’t worth the return anymore and that the value rewards credit cards had declined significantly. And they might not be wrong either, as the average rewards card’s net value has plummeted from $126 five years ago to a mere $34 in 2020. 

But that didn’t stop rewards card providers from dishing out a bundle of bonus point deals to entice new customers. There were also cashback deals from providers big and small, including Amex, NAB, Westpac and BankSA.

How about Buy Now Pay Later or interest-free options?

Over the last few years, Buy Now Pay Later (BNPL) companies have taken Aussies shoppers by storm, promising interest-free spending and flexible repayment options. To combat this, big banks CommBank and NAB threw down the gauntlet and launched their adaptation: an interest-free credit card. 

NAB made a move first, releasing its ‘Straight Up’ interest-free credit card in September 2020 and CommBank shortly followed by revealing its Neo interest-free credit card in December 2020. 

Both cards promise no late fees and interest-free spending, however, there is a monthly fee based on the customer’s credit limit. 

The result? It was a hit. 

CommBank figures from a month ago found that one-third of all credit card approvals in December was for the Neo interest-free credit card, with more than half of the card’s uptake coming from millennials alone. 

American Express also moved to keep up with BNPL companies with their version, ‘Plan It’. 

Like BNPL, Amex customers can now make purchases ($150 minimum spend) using their card at any American Express-accepting merchant and pay them off in interest-free instalments of either three, six, nine or twelve months. 

Phew, that was a lot! 

But just in case you’re still hungry for more, you can head on over to our credit card comparison tool to keep up with some of the latest credit card offers around.

Compare low rate credit cards - rates updated daily

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure.
  • Apply By 31 October 2021
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    Bendigo Bank Low Rate Credit Card

    0% p.a. on purchases for 12 months (Reverts to 11.99% p.a). Also 0% balance transfer for 12 months. Low annual fee of $45 and no fees for additional cardholders.

    Purchase rate
    Balance transfer rate
    Annual fee
    0% p.a. for 12 months then 11.99% p.a.
    0% p.a. for 12 months and then 11.99% p.a. (2.00% balance transfer fee)
    $45
    Go to site
    Details
  • Apply By 30 November 2021
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    St.George Vertigo - Cashback Offer

    $300 cashback when you take out a new Vertigo Credit Card and spend $4k on eligible purchases within 120 days of the new card approval. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply. Offer ends November 30th 2021.

    Purchase rate
    Balance transfer rate
    Annual fee
    13.99% p.a.
    6.99% p.a. for 12 months and then 21.49% p.a.
    $55 $0 in the first year
    Go to site
    Details
  • Apply By 30 November 2021
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    Westpac Low Rate

    Enjoy a super low rate of 13.74% with 55 days interest free plus 0% balance transfer for up to 28 months at 1% BT fee. No annual card fee for the first year, $59 thereafter. New Cards only. Offer ends November 30th 2021. T&C's and exclusions apply.

    Purchase rate
    Balance transfer rate
    Annual fee
    13.74% p.a.
    0% p.a. for 28 months and then 21.49% p.a. (1.00% balance transfer fee)
    $59 $0 in the first year
    Go to site
    Details
  • placeholder
    NAB StraightUp Card

    $10/month - $1,000 Credit Limit

    Pay no interest and no late payment fees, just a $10 monthly fee for a $1,000 credit limit. Plus, if you don't make any purchases and have an outstanding balance of $0 during the whole statement period, the monthly fee will be reversed. Also pay no foreign currency fees when you shop online or overseas. Mozo Experts Choice Credit Card Innovation Winner 2020^.

    Purchase rate
    Balance transfer rate
    Annual fee
    0% p.a.
    No current offer
    $120 $10/month - waived if no spend & no balance owing
    Go to site
    Details

^See information about the Mozo Experts Choice Credit Card Awards

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